The Financial Survivor

2 minute read

How long could you live without a paycheck?

Not a fun thing to think about, but as a doctor, you know better than anyone about the unpredictable nature of illness and injuries. 

Thinking about how you would survive if you became disabled and lost your job tomorrow isn’t a fun thing to think about. But accidents and illnesses happen! 

If you find yourself out of work, how long do you think you could manage without your monthly income?

WHERE DO YOU SPEND YOUR MONEY?

When you’re looking at your monthly income and expenses, where do you spend your money?

Let’s take Sam as an example. 

Sam is an Attending Physician whose specialty is General Surgery, with an annual salary of $295,000. 

His medical school debt has accumulated to a total of $200,000 which he plans to pay off in 6 years, making his monthly payments $3,360. Luckily, he doesn’t have any credit card debt.

Sam lives in Arizona,  recently bought a new home, drives a 2016 Range Rover, and takes care of his 6-month-old Goldendoodle who loves going to doggie daycare. 

He is a monthly subscriber to Stitch Fix, Netflix, and Youtube TV. He likes hiking and, due to his busy schedule, uses a meal-kit delivery service. 

And he can’t live without WiFi, so he has the fastest option available. After adding all of these monthly expenses and calculating in his home and auto insurance, Sam’s monthly payments are around $8,520.

But one day Sam is hiking, falls, and breaks both his radius and ulna. And unfortunately for Sam, he develops post-traumatic synostosis and has to go back for another surgery, keeping him out of work even longer.

HOW WOULD YOU SURVIVE WITHOUT YOUR MONTHLY INCOME?

So how long could he keep living his life without his monthly income? It would depend on his savings and whether he had disability insurance.

Without disability insurance and limited savings, Sam’s options aren’t great. Doggie daycare is definitely gone, along with Stitch Fix and meal delivery. 

But those are the easy options. What about his house? And his car? With no savings and without disability insurance, chances are he would be stressed and uncertain about his finances. 

Even with the group disability insurance paid for by his hospital, he still has to make some very tough choices. 

Because group disability insurance is only 60% of his income and is taxed even more after that, it’s not enough to cover all of his expenses without making some difficult changes.

Luckily for Sam, he had private own-occupation disability insurance that exists precisely for situations like this.

It fills the gap between his income and group disability insurance. Sam doesn’t have to stop meal delivery services or his WiFi service. 

And more importantly, he won’t fall behind on his student loan payments or have to sell his house or car.

While thinking about serious illness or injury isn’t the most fun thing to think about, it’s a super important part of financial planning for doctors. 

So if you want to make sure you’re prepared for anything like Sam was, fill out a quote request here.